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EXHIBIT 2
This Deed of Charge and Memorandum of Deposit is made by way of deed on the
30th day of October, 1997.
By
(1) Starion International Limited, a British Virgin Islands company with
registered number IBC-15721 having its registered office at Woodbourne
Hall, P.O. Box 3162, Road Town Tortola, British Virgin Islands (the
"Depositor"); and
(2) Dallah Albaraka Investment Company Limited, an English company
("DAICO).
WHEREAS:
(A) Pursuant to a Murahaba Agreement dated 19 December 1995 between DAICO
and Starion International Limited, an English company which is an
affiliate of the Depositor with registered number 1783578 having its
registered office at 000 Xxxxxxxx Xxxx, Xxxxx Xxx, Xxxxxx, Xxxxxxxxx,
XX0 0XX ("SIL"), DAICO has agreed to provide a facility to SIL (the
"Facility") to finance the acquisition of goods by SIL.
(B) Pursuant to a letter dated 19 September 1997, DAICO has agreed to
extend the maturity of the Facility from 31 October 1997 to 31 October
1998.
(C) One of the conditions precedent for the extension of the Facility
until 31 October 1998 is a pledge of shares of common stock of Tristar
Corporation, a Delaware corporation ("Tristar"), having a value equal
to US$4,000,000.
(D) The Depositor desires to pledge shares of common stock of Tristar in
order to satisfy the foregoing condition precedent.
NOW IT IS HEREBY DECLARED
1. Definitions
When used herein, the following terms have the following meanings (such
meanings to be applicable to both the singular and plural forms of such terms);
"Event of Default" means (a) any of the events specified in Clause 7 of the
Murabaha Agreement or (b) the Depositor's failure to comply with the provisions
of Clause 8 hereof.
"Issuer" means the issuer of any of the shares or other securities representing
all or any of the Securities.
"NASDAQ" means The Nasdaq Stock Market, Inc.
"Person" means any natural person, firm, company, corporation, body corporate,
government, state or agency of a state or any association or partnership
(whether or not having a separate legal personality) of two or more of the
foregoing.
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"Secured Obligations" means (a) all sums and liabilities covenanted to be paid
and discharged by SIL in the Murabaha Agreement and (b) the Depositor's
obligations pursuant to Clause 8 hereof.
Any capitalized term used and not defined herein shall have the meaning
ascribed thereto by the Murabaha Agreement.
2. Security for the Secured Obligations.
Subject to the provisions of Clause 7.3 hereof, the Depositor by way of
continuing security for the payment, performance and satisfaction when due of
the Secured Obligations hereby charges by way of first fixed equitable charge
and assigns by way of security to DAICO all of its right, title and interest in
and to the following:
(a) 400,000 shares of common stock of Tristar registered in the
Depositor's name, all of the certificates and/or instruments
representing such shares and all cash, securities, dividends, rights
and other property at any time and from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of such shares;
(b) Any additional shares of common stock of Tristar required to be
deposited hereunder pursuant to Clause 8 hereof;
(c) All other property hereafter delivered to DAICO in substitution for or
in addition to any of the foregoing, all certificates and instruments
representing or evidencing such property, and all cash, securities,
interest, dividends, rights and other property at any time and from
time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all thereof, and
(d) All products and proceeds of all of the foregoing.
All of the foregoing are herein collectively called the "Securities".
3. Continuing Security.
The security is to be a continuing security, notwithstanding any intermediate
payment or settlement of accounts or any other matter whatsoever, for the
payment, performance and satisfaction of the Secured Obligations, as and when
the same shall fall due, and is to be in addition to, and without prejudice to,
any other security which DAICO may now or hereafter hold in respect of the
Secured Obligations. DAICO may at any time, without notice to or the consent of
the Deposition, give us, release, deal with, vary exchange or abstain from
perfecting or enforcing any other such security at any time and discharge any
party to any other such security, and realize the same, without in any way
affecting or prejudicing the security evidenced by this Deed of Charge and
Memorandum of Deposit.
4. Undertaking to Deposit
The Depositor hereby undertakes to deposit with DAICO, to the intent that the
same shall be subject in all respects to the provisions of this Deed of Charge
and Memorandum of Deposit;
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(a) such additional shares of common stock of Tristar registered in the
name of the Depositor, together with all of the certificates and/or
instruments representing such shares, as are required to be deposited
pursuant of Clause 8 hereof;
(b) all certificates, notes, documents of title and other documentary
evidence of all rights, bonuses, new shares, stock, rights to take up
securities or other securities or other securities of whatever nature
(including without limitation any security resulting from any
conversion, consolidation or subdivision of the Securities or rights
arising from a reduction of capital, liquidation or scheme of
arrangement) which at any time during the continuance of this Deed of
Charge and Memorandum of Deposit may be issued in respect of any of,
or attributable to, the Securities; and
(c) instruments of transfer or endorsements of the Securities, in form and
substance satisfactory to DAICO, duly executed (but left undated) by
the Depositor or its nominee and completed in favour of DAICO or
otherwise as DAICO may direct; and
(d) prior to the delivery thereof to DAICO such Securities and other
documents shall be held by the Deposit or separate and apart from its
other property and in express trust for DAICO.
5. Warranties and Further Assurances.
5.1 The Depositor warrants to DAICO that: (a) it charges and assigns the
Securities with full title guarantee (and that any future delivery, charge and
assignment or transfer thereof will also be with full title guarantee) and
further that, in each case, the Securities are free and clear of all liens
security interests and encumbrances of every description whatsoever other than
the security interest created hereunder; (b) assuming continuous possession of
the Securities by DAICO, this Deed of Charge and Memorandum of Deposit and the
actions contemplated hereby are effective to create a valid first fixed
equitable charge and, as the case may be, assignment by way of security in, to
or over the Securities in favour of DAICO; (c) all shares of common stock of
Tristar which are subject to this Deed of Change are duly authorized, validly
issued, fully paid and non-assessable and registered in the name of the
Depositor; and (d) except for any filings that may be required to be made under
any US federal or state antitrust or securities laws in connection with DAICO's
offer, sale, transfer or assignment of the Pledged Shares no filing with or
consent of any governmental authority is required for the Depositor's pledge of
the Pledged Shares pursuant to, or the exercise by DAICO of its rights and
remedies under, this Deed of Charge and Memorandum of Deposit.
5.2 So long as any of the Secured Obligations shall be outstanding or any
commitment shall exist on the part of DAICO with respect to the creation of any
Secured Obligations, the Depositor;
(a) shall not without the express prior written consent of DAICO, (i)
sell, assign, exchange, charge or otherwise transfer, encumber, or
grant any option, warrant or other right to purchase the Securities or
(ii) otherwise diminish or impair any of its rights in, to or under
any of the Securities;
(b) shall execute such documents and made such endorsements (and pay the
costs of filing and recording or re-filing and re-cording the same in
all public offices reasonably deemed necessary or appropriate by
DAICO) and do such other acts and things, all as DAICO
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may from time to time reasonably request, to establish and maintain a
valid, perfected security interest in the Securities (free of all
other liens, claims and rights of third parties whatsoever) to secure
the performance and payment of the Secured Obligations; and
(c) will furnish DAICO such information concerning the Securities as DAICO
may from time to time reasonably request, and will permit DAICO or any
designee of DAICO from time to time at reasonable times and on
reasonable notice, to inspect, audit and make copies of and extracts
from all records and all other papers in the possession of the
Depositor which pertain to the Securities and will, upon request of
DAICO at any time when an Event of Default has occurred and is
continuing, deliver to DAICO a copy of all of such records and papers.
6. Holding in Name of Security Trustee, etc.
6.1 DAICO may from time to time after the occurrence of an Event of
Default which is continuing, upon giving notice to the Depositor take
all or any of the following actions:
(a) transfer all or any part of the Securities into the name of DAICO or
any nominee or sub-agent for DAICO, with or without disclosing that
such Securities are subject to the security interests hereunder,
(b) appoint one or more sub-agents or nominees for the purpose of
retaining physical possession of the Securities,
(c) notify the parties obligated on any of the Securities to make payment
to DAICO of any amounts due or to become due thereunder,
(d) endorse any cheques, drafts or other writings in the name of the
Depositor to allow collection of the Securities,
(e) enforce collection of any of the Securities by suit or otherwise, and
surrender, release or exchange all or any part thereof, or compromise
or review for any period (whether or not longer than the original
period) any obligations of any nature of any party with respect
thereto, and
(f) take control of any proceeds of the Securities.
7. Voting Rights, Dividends, Payments, etc.
7.1 Notwithstanding certain provisions of Clauses 2 and 6 hereof, so long
as DAICO has not given the notice referred to in Clause 7.4 below:
(a) the Depositor shall be entitled to exercise any and all voting or
consensual rights and powers and share purchase or subscription rights
relating or pertaining to the Securities constituting shares or any
part thereof for any purpose; and
(b) the Depositor shall be entitled (i) to receive and retain any and all
lawful dividends payable in respect of the Securities constituting
shares which are paid in cash by the Issuer and (ii) to expend and
otherwise deal with all cash proceeds of such dividends
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and distributions received by it provided, however, that all dividends
and distributions in respect of such Securities or any part thereof
made in shares or other property whether resulting from a subdivision,
combination or reclassification of such Securities or any part thereof
or received in exchange for such Securities or any part thereof or as
a result of any merger, consolidation, acquisition or other exchange
of assets to which the Issuer may be a party or otherwise or as a
result of any exercise of any share purchase or subscription right,
shall be and become part of the Securities hereunder and, if received
by the Depositor, shall, pursuant to and in accordance with the
provisions of Clause 4 hereof, be forthwith delivered to DAICO
together with appropriate instruments of transfer duly executed in
xxxxx to be held for the purposes of this Deed of Charge and
Memorandum of Deposit.
7.2 DAICO shall execute and deliver, or cause to be executed and delivered
to the Depositor, all such proxies, powers of attorney, dividend orders and
other instruments as the Depositor may request for the purpose of enabling the
Depositor to exercise the rights and powers which it is entitled to exercise
pursuant to Clause 7.1 (a) above and to receive the dividends which it is
authorized to retain pursuant to Clause 7.1 (b) above.
7.3 The Depositor shall be entitled (a) to collect all regular payments
made or proceeds received with respect to the Securities described in Clause
2(c) hereof and enforce and prosecute all rights and remedies available under
any of such Securities.
7.4 Upon written notice from DAICO during the existence of an Event of
Default, and so long as the same shall be continuing unwaived, all rights and
powers which the Depositor is entitled to exercise pursuant to Clause 7.1(a)
hereof and all rights of the Depositor to receive and retain dividends pursuant
to Clause 7.1 (b) hereof and all rights of the Depositor to receive payments
pursuant to Clause 7.3 hereof shall forthwith cease, and all such rights and
powers shall thereupon become vested in DAICO which shall have, during the
continuance of such Event of Default, the sole and exclusive authority to
exercise such rights and powers and to receive such dividends and payments. Any
and all money and other property paid over to or received by DAICO pursuant to
this Clause 7.4 shall be retained by DAICO as additional Securities hereunder
and applied in accordance with the provisions hereof.
8. Deposit of Additional Shares of Tristar Common Stock, Register of
Mortgages.
The Depositor hereby covenants with DAICO that;
(a) If the aggregate market value of the shares of common stock of Tristar
deposited hereunder by the Depositor (determined by the closing price
on NASDAQ on each trading day) ceases to be at least 90% of
US$4,000,000, i.e. US$3,600,000, at any time, the Depositor shall,
within fifteen (15) days after DAICO gives written notice to the
Depositor that such aggregate market value has ceased to be at least
US$3,600,000 (unless such aggregate market value increases to at least
US$3,600,000 during such fifteen (15) days period), deposit with DAICO
such number of additional shares of common stock of Tristar, together
with the certificates and/or instruments representing such shares, as
is necessary to restore such aggregate market value to not less than
US$4,000,000.
(b) The Depositor shall: (i) within three (3) days after the Depositor's
execution of this Deed of Charge and Memorandum of Deposit, establish
at its registered office in the British
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Virgin Islands a register of Mortgages, Charges and other Encumbrances
(the "Register of Mortgages"), enter on the Register of Mortgages the
relevant particulars of this Deed of Charge and Memorandum of Deposit
and register a copy of the Register of Mortgages at the Registry of
Companies of the British Virgin Islands as part of the Depositor's
records on file at the Registry of Companies available for inspection
by the public; and (ii) thereafter maintain the Register of Mortgages
at its registered office in the British Virgin Islands.
9. Remedies
9.1 After the occurrence of an Event of Default and during its continuance
DAICO may exercise from time to time any rights and remedies available to it
and, without limiting the foregoing, whenever an Event of Default has occurred
and is continuing, upon written notice to the Depositor, DAICO.
(a) may, to the fullest extent permitted by applicable law, without
notice, advertisement, hearing or process of law of any kind:
(i) sell any or all of the Securities, free of all rights and
claims of the Depositor therein and hereto, at any public or
private sale; and
(ii) bid for and purchase any or all of the Securities at any such
public sale.
(b) shall have the right for and in the name, place and stead of the
Depositor, to execute endorsements, assignments, share transfer forms
and other instruments of conveyance or transfer with respect to all or
any of the Securities; and
(c) The Depositor hereby expressly waives, to the fullest extent permitted
by applicable law, any and all notices, advertisements hearings or
process of law in connection with the exercise by DAICO of any of its
rights and remedies after the occurrence and during the continuance of
an Event of Default. Any proceeds of any of the Securities may be
applied by DAICO to the payment of expenses in connection with the
Securities, including, without limitation, reasonable legal fees and
disbursements, and any balance of such proceeds may be applied by
DAICO toward the payment of such of the Secured Obligations, and in
such order of application, as DAICO may from time to time elect (and,
after payment in full of all Secured Obligations, any excess shall be
delivered to the Depositor or as a court of competent jurisdiction
shall direct).
9.2 DAICO is hereby authorized to comply with any limitation or
restriction in connection with any sale of the Securities as it may be advised
is necessary in order to (a) avoid any violation of applicable law (including,
without limitation, compliance with such procedures as may restrict the number
of prospective bidders and purchasers and/or further restrict such prospective
bidders or purchasers to persons or entities who will represent and agree that
they are purchasing for their own account for investment and not with a view to
the distribution or resale of such Securities) or (b) obtain any required
approval of the sale or of the purchase by any governmental regulatory
authority or official, and the Depositor agrees that such compliance shall not
result in such sale being considered or deemed not to have been made in a
commercially reasonable manner and that DAICO shall not be liable or
accountable to the Depositor for any discount allowed by reason of the fact
that such Securities are sold in compliance with any such limitation or
restriction.
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10. Power of Attorney
In addition, and without limiting the powers of DAICO set forth in Clause 9,
the Depositor hereby irrevocably and by way of security appoints DAICO and any
person nominated in writing by any officer of DAICO severally to be its
attorney for it and in its name and on its behalf and as its act and deed to
prepare, complete, execute, seal, deliver, lodge and file and otherwise perfect
and do any deed, assurance, agreement, instrument, transfer, memorandum, form,
act or thing and institute and conduct any proceedings which the Depositor is
required to extend and do under this Deed of Charge and Memorandum of Deposit
or, following the occurrence and during the continuance of an Event of Default,
which DAICO may deem necessary or prudent in order to effect or complete any
sale made by DAICO of any or all of the Securities or in order to protect,
preserve or realise any of all of the Securities or in order to enforce or
prosecute any rights which such Depositor or DAICO may enjoy in respect of or
under any or all of the Securities, including the giving of receipts for all
payments made under or in respect of all or any of the Securities and executing
and doing all or any of the documents, acts and things referred to in Clause 9
hereof. The Depositor will on request by DAICO execute all such transfers,
powers of attorney and other documents as DAICO may require (i) for the
purposes of perfecting or preserving the rights and interests of DAICO under or
pursuant to this Deed of Charge and Memorandum of Deposit or in respect of all
or any of the Securities or (i) following the occurrence and during the
continuance of an Event of Default to have all or any of the Securities
registered in the name of DAICO or its nominees or to vest all or any of the
Securities in a purchaser or transferee following enforcement of this security.
11. Law of Property Act, 1925
Clauses 93 (restricting the rights of consolidation) and 103 (restricting the
right of sale) of the Law of Property Act, 1925 shall not apply to the security
evidenced by this Deed of Charge and Memorandum of Deposit.
12. General
12.1 DAICO shall be deemed to have exercised reasonable care in the custody
and preservation of the Securities if it takes such action for that purpose as
the Depositor shall request in writing, but failure of DAICO to comply with any
such request shall not of itself be deemed a failure to exercise reasonable
care, and no failure of DAICO to preserve or protect any rights with respect to
the Securities against prior parties, or (in the absence of negligence or
wilful default) to do any act with respect to preservation of the Securities
not so requested by the Depositor, shall be deemed of itself a failure to
exercise reasonable care in the custody or preservation of the Securities.
12.2 No delay on the part of DAICO in exercising any right, power or remedy
shall operate as a waiver thereof, and no single or partial exercise of any
such right, power or remedy shall preclude any other or further exercise
thereof, or the exercise of any other right, power of remedy.
12.3 No amendment, modification or waiver of, or consent with respect to,
any provision of this Deed of Charge and Memorandum of Deposit shall be
effective unless the same shall be in writing and signed and delivered by DAICO
and the Depositor, and then such amendment, modification, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
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12.4 All obligations of the Depositor and all rights, powers and remedies
of DAICO expressed herein are in addition to all other rights, powers and
remedies possessed by it, including, without limitation, those provided by
applicable law or in any other written instrument or agreement relating to any
of the Secured Obligations or any security therefor.
12.5 This Deed of Change and Memorandum of Deposit may be executed in any
number of counterparts and by different parties hereto on separate
counterparts, and each such counterpart shall be deemed to be an original, but
all such counterparts shall together constitute one and the same Deed of Charge
and Memorandum of Deposit.
12.6 This Deed of Charge and Memorandum of Deposit shall be binding upon
the Depositor and DAICO and their respective successors and assigns, and shall
inure to the benefit of each of the Depositors and DAICO and the successors and
assigns of DAICO.
12.7 All notices, requests, demands and other communications pursuant to
this Deed of Charge and Memorandum of Deposit shall be in writing and shall be
deemed to have been duly given if telecopied or sent by reputable international
courier to the other party at the address set forth under such party's
signature on the signature page of this Deed of Charge and Memorandum of
Deposit.
13. Governing Law and Jurisdiction.
13.1 This Deed of Charge and Memorandum of Deposit shall be governed by,
and shall be construed in accordance with, English law.
13.2 The Depositor hereby irrevocably (a) agrees for the benefit of DAICO
that the courts of England shall have jurisdiction to hear and determine any
suit, action or proceeding, and to settle any disputes, which may arise out of
or in connection with this Deed of Charge and Memorandum of Deposit and, for
such purposes, irrevocably submits to the jurisdiction of such courts and (b)
waives any objection which it might now or hereafter have to the courts
referred to in this Clause 13.2 being nominated as the forum to hear and
determine any action or proceeding, and to settle any disputes, which may arise
out of or in connection with this Deed of Charge and Memorandum of Deposit and
agrees not to claim that any such court is not a convenient or appropriate
forum.
13.3 The submission to the jurisdiction of the courts referred to in Clause
13.2 hereof shall not (and shall not be construed so as to) limit the right of
DAICO to take proceedings against the Depositor in any other court of competent
jurisdiction nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other jurisdiction
(whether concurrently or not) if and to the extent permitted by applicable law.
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IN WITNESS WHEREOF this Deed of Charge and Memorandum of Deposit has been
executed as a deed by the Depositor and has been signed by or on behalf of
DAICO and is intended to be and is hereby delivered on the date first above
written
STARION INTERNATIONAL LIMITED
SEAL
THE COMMON SEAL OF STARION (sd/- Xxxxxxxx X. Xxxxx)
INTERNATIONAL LIMITED was
hereunto affixed in the presence of
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Director
Address: Standard Chartered Bank Building
6th Floor
BUR Dubai
PO Box 5551
UAE
Facsimile No. 0181-4249240
Attention Xxx Xxxxx
DALLAH ALBARAKA INVESTMENT COMPANY LIMITED
By: (sd/- Dinshaw) sd/- Xxxxx Xxxxxx
------------------------------
Name: Xxxxxx X Xxxxxxx Financial Controller.
Title : Senior Manager Credit
Address: 00 Xxxxx Xxxxx Xxxxxx
Xxxxxx
X0X 0XX
Facsimile No. 0171 647 8420
Attention N A Dinshaw
